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Economic Multipliers (156)
Do you know what these are?
They help CREATE wealth in systems.
This will never happen (#2): If it did, it would be a HUGE economic multiplier for the United States.
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The federal government is never going to assess a 5 cent tax on every gallon of fossil fuel sold in the United States to specifically be used to permanently monitor and/or abandon ‘in limbo’ offshore oil wells.
Offshore oil and rig companies are losing business and some are declaring bankruptcy. Others may declare bankruptcy in the future if they have lower prices, less contracts and less work. A nation never ‘wins’ when highly trained people and equipment lie idle and whether you are an advocate of offshore drilling or not, a LOT of old wells exist which have not been properly abandoned. If any of these wells ‘leak’ in the future, a LOT of money will need to be spent on cleanup … money that has not been set aside.
Operating companies which own offshore oil wells are responsible for cleanup and damage if anything goes wrong.
When companies go into bankruptcy, no people or money are left to take ‘responsibility.’ If something goes wrong, communities, states and the federal government must ‘bear the cost.’
When the Superfund program, a massive environmental cleanup program, was initiated in the United States in the 1980’s, a large percentage of the cleanup and legal expenses was ‘assigned’ to operating companies.
At the time, I thought the excessive litigation made no sense since the greater percentage of the companies were doing the same things and consumers had benefited when they paid prices which did not reflect the ‘true cost’ of the products being bought.
My view has not changed. Fossil fuels extracted years ago and sold at lower than reasonable prices did not reflect the ‘true cost.’
Today, workers and equipment which might lie idle due to the oil industry downturn could be used to start tackling the ‘in limbo’ offshore oil wells so future generations have less exposure to environmental disasters.
The United States would ‘win’ on several fronts. A federal backlog of ‘problem sites’ could slowly be whittled away, workers would retain their skills and paychecks and equipment that would command much lower day rates in this oil industry ‘down time’ could be utilized, making it much more likely that companies could service their debt. Companies which could potentially go out of business would have a greater chance to survive.
Know that all ideas have ‘risk.’ In the process of ‘properly abandoning’ an old offshore well, something could go wrong. The process of abandonment itself could cause environmental problems. It may even make more sense to place ‘monitoring domes’ over these sites as pseudo-permanent measures whereby if ‘product’ was ever released, some capture mechanism could be added (think below surface empty bladders (balloons) which could be routinely tapped (emptied) if a leak occurred).
Keep in mind that it is the responsibility of adults to minimize risks for future generations and adults aren’t always good at accepting that responsibility.
Likewise:
The best time to assess an extra tax on fossil fuels is when fossil fuel prices are lower.
The best time to contract out for offshore drilling services for environmental abatement and risk minimization is when day rates are lower.
The best time to develop options for potential future problems is before they occur.
The United States government and the oil industry have known about the offshore oil well abandonment problem for many years.
Unfortunately, we have become a ‘crisis’ oriented nation.
Well, this time the crisis is an economic one. Wouldn’t it be great if a response to one crisis could help prevent another?
Of course, something like this will never happen. It’s way too practical.
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Economic Multipliers 82 has some ‘old’ thoughts about the Superfund program and the unfortunate expenditure of excessive amounts of funds. Fortunately, programs and thinking can evolve.
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